February has been a busy month for RetireOne. There’s still plenty we’re working on that we can’t talk about yet, but one thing we can talk about is the addition of Dimensional Fund Advisors investment strategies to our contingent deferred annuity (CDA), Constance. We believe in Constance and what it can do to revolutionize the retirement industry, and we’re committed to continually improving it.
InvestmentNews reported on our press release:
The annuity, launched last October and known as Constance, allows registered investment advisers to wrap client brokerage accounts, individual retirement accounts or Roth IRAs with an annuity.
“Adding Dimensional’s research and expertise in asset allocation and model management strengthens the Constance offering,” said Edward J. Mercier, President of RetireOne.
Michelle Richter, Executive Director of the Institutional Retirement Income Council, also talked about the news on LinkedIn, including this quote from Nobel Laureate Robert Merton:
A good retirement is a comfortable standard of living, which is measured by the amount of sustainable lifetime income received, and not by the size of the accumulated ‘pot.’ Significant numbers of Americans retire today without the reassurance of an adequate pension. New and innovative lifetime income solutions will be critical for addressing the looming retirement planning crisis. A well-designed Contingent Deferred Annuity offers new and flexible ways to create guaranteed lifetime income directly from IRAs, Roth IRAs, and brokerage accounts.
The Retirement Income Journal also ran a story about the announcement: “Many RIAs would like to give their clients a lifetime income guarantee without cannibalizing their assets under management. A contingent deferred annuity, aka a stand-alone living benefit, lets them do that.”
In other news, Lynnley Browning wrote an article for FinancialPlanning about the LIFE Act, a bill designed to allow companies to make annuities the default option in their employees’ retirement plans. Our CEO, David Stone, is quoted in the article as saying that the bill, if it passes, “will help plan participants have better access to a pension-like guaranteed income stream for life.”
Browning is a bit more critical of the LIFE Act: “By putting annuities in 401(k)s, the bill could blunt the impact of advisors who dislike them.”
While that may be true, clients want and need to protect their spending power in retirement. Without the certainty provided by pensions, it’s time for advisors to look into how annuities have changed, and examine how to better serve that need.